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Off-Label Promotion
By Sara Dyson, Esq.
Q

Question:  What risk management precautions should a firm take if significant sales are derived from off-label use of its drug or device?

 

A

Sara DysonAnswer: Promoting medical devices and drugs for uses that have not been approved by the Food and Drug Administration (FDA) constitutes off-label promotion, which is forbidden by the Federal Food, Drug and Cosmetic Act (FDCA).  Companies that promote off-label face severe criminal and civil penalties.  In recent years, off-label promotion has been the subject of countless Warning Letters, cost the industry billions in fines, led to jail time for company executives, resulted in Corporate Integrity Agreements and Deferred Prosecution Agreements, and triggered costly products liability lawsuits.  Yet, even so, many medical device and drug companies continue to profit significantly from the off-label uses of their products.  

 
Off-label promotion must not be confused with off-label use, which is perfectly legal.  The FDCA expressly provides that the FDA is not permitted “to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within the legitimate health care practitioner-patient relationship.” 21 USC § 396. Generally speaking, the FDA does not regulate the practice of medicine.  This means that physicians are free to use approved devices and drugs for unapproved uses—and, indeed, they frequently do.  In fact, the off-label uses of certain products may be the standard of care.  For example, the availability of devices and drugs approved for pediatric use is limited, so out of necessity pediatricians must use devices and drugs off-label frequently. 
 
The prevalent, off-label uses of certain products mean that their manufacturers will profit, legally, from off-label sales.  However, under these circumstances, it is important that manufacturers implement risk management strategies to ensure that they do not engage in any practices that may be construed as off-label promotion.
 
Making the Use “On-Label”
 
One surefire way to mitigate the risk of off-label promotion is to make the use “on-label.”  A company that derives significant sales from the off-label use of its product should consider seeking FDA approval of the use.  This process often comes at considerable expense given the costs associated with developing the approval submission, including the often expensive clinical research necessary to support the approval.  However, in some cases, the benefits of making the use on-label outweigh the costs.  For example, the drugs marketed under the brand names Viagra and Rogaine were initially developed to treat hypertension.  Their off-label uses−the common uses we associate with these drugs−were eventually recognized as potentially more profitable than the use for which the drugs were developed, causing their manufacturers to seek approval of the off-label uses.
 
For some drug companies, seeking approval of an off-label use may not be as expensive or as complicated as one might expect.  When a company wishes to make changes to one of its previously approved drugs, such as adding a new indication for use, the FDA has created a more streamlined path to approval through the 505(b)(2) NDA. 21 CFR § 314.54. The FDA recognizes that conducting new clinical trials to demonstrate the safety of an already approved drug would be wasteful, as the safety of the drug is already known.1 Further, under the 505(b)(2) process, the FDA will accept some or all of the evidence necessary to demonstrate the effectiveness of the drug for the new indication from published literature.  Therefore, if a drug is used frequently in the medical community for an off-label purpose, and if the off-label use has been studied by the medical community and covered in published literature, a company could potentially file an NDA for the new indication without conducting any clinical trials of its own.
 
Making a use on-label has benefits beyond merely allowing the company to promote that particular use.  It also makes the product eligible for reimbursement from third-party payers and provides the medical community with more complete information about the product, thereby mitigating products liability risk.  Typically, the information contained in a product’s instructions for use, warnings, and labeling relate only to the product’s on-label uses—off-label information is excluded.  When healthcare practitioners decide to use the product off-label, they may have less-than-adequate information about the safe, off-label use of the product or about the hazards associated with the off-label use, potentially creating a basis for a failure to warn claim.  Making a use on-label mitigates this risk by allowing the company to provide more information about this particular use of the product.
 
Best Practices for Preventing Off-Label Promotion
 
A company that decides not to pursue FDA approval of an off-label use should be vigilant about preventing even the appearance of off-label promotion.  When a company is profiting from off-label sales, it may be easy for the FDA or plaintiffs’ attorneys to make the inference that the company is promoting the product off-label and not merely benefitting passively from the product’s off-label sales.  Medmarc’s Loss Control Department has developed a list of “best practices” to prevent off-label promotion.  The full list is available upon request, but the basic foundation for any off-label promotion risk management strategy includes the following:
 
  • Develop a written policy that states unequivocally the company’s commitment to preventing off-label promotion.
  • Monitor compliance with the off-label promotion policy and enforce its disciplinary provisions should any infractions occur.
  • Require sales representatives to undergo off-label promotion training on an annual basis.
  • Ensure that all calculations used to determine compensation—particularly the compensation of sales representatives—exclude sales attributable to off-label use.
  • Review all promotional materials to ensure that off-label information is not included.
  • Refer all inquiries from healthcare practitioners regarding off-label uses to the company’s medical liaison (“medical rep”), who should report into a department other than the marketing or sales department.
  • Ensure that the company’s products liability insurance policy covers claims that arise from the off-label use of the product. 

 

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[1] See “Draft Guidance for Industry: Applications Covered by Section 505(b)(2),” available here.

Sara Dyson, Esq., is the Assistant Vice Presdient, Loss Control for Medmarc Insurance Group. She provides loss control services that are designed to reduce products liablity risks to over 1000 drug and medical device companies.